MNI 5 Things: China SOE Debt Key to Controlling Fin'l Risks

     BEIJING (MNI) - The following lists the major points on financial

regulations and investments that MNI learned from a conference of top

policymakers and advisors open to the press on Thursday:

     1) China is creating new regulations to control debt ratios of state-owned

companies, a segment that is critical to its campaign reining in debt growth,

according to Yang Weimin, deputy director of the Office of the Central Leading

Group on Financial and Economic Affairs. 

     2) Some of the medium-sized Chinese cities, especially the so-called tier-3

and tier-4 ones surrounding large cities with fast economic growth, are

experiencing housing bubbles, so property controls need to be kept tight there

to prevent over-heating that may endanger the overall economy, Yang said.

     3) To effectively control financial risks, which may be triggered by

China's high level of debt, the nation needs to maintain GDP growth between 6%

to 7% while limiting borrowing, especially rampant growth of hidden local

government debt, Yang said.

     4) The government supports boosting outbound investment and the use of the

yuan in global transactions. Financial institutions should actively advance the

use of yuan in cross-border trade, further the internationalization of the yuan

and also financial service innovation, said Hu Xiaolian, head of the

Export-Import Bank of China and a former deputy PBOC governor.

     5) Chinese companies should invest in technological advancement and

improving production capacity, while refrain from buying overseas sports clubs

and entertainment assets such as cinemas as seen in recent years, Hu said. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com